1. A bank with deposits of $500 million has $75 million in cash on hand, $50 million in deposits with the Bank of Canada, and $80 million in government securities. If the reserve requirement is 15 percent, the bank has excess reserves of?

2. The desired reserve ratio is 10 percent. A bank with $100 million in deposits has $5 million in vault cash, $6 million on deposit with the Bank of Canada, government securities of $9 million, and other assets of $80 million. If someone deposits a cheque for $1 million in the bank, the maximum loan the bank can now make is?

Answer rating: 100% (QA)

1 To calculate the excess reserves of the bank we need to determine the required reserves first The ... View the full answer